A startup bicycle company aims to capitalize on the growing pool of commuter bicyclists with a new frame design that emphasizes comfort and efficiency.
The company’s flexible frame technology negates the long-held assumption that a rigid bicycle frame equates to more efficiency and power, said Mark Groendal, president of the Grand Rapids-based Alter Cycles LLC.
But while some initial customers have been quick to support the new technology, the company realizes it will face an uphill battle to introduce its product in a market historically resistant to disruptive technology. As such, Alter Cycles plans to focus on the commuter and recreational markets instead of more performance-minded riders who are typically the most resistant to anything but a rigid frame.
“We’re hitting that fitness and commuter market first and the most important thing to those people is comfort,” Groendal said. “This bike really fits in well … (but) we’re going against that perception, so it’s tough.”
Instead of a traditional rigid metal downtube, the company developed a curved leaf-type spring that allows the bicycle frame to flex while being ridden. The effect for the rider is twofold, Groendal said. The flexible downtube allows the frame to absorb more shock from the road than a rigid frame, making for a more comfortable ride. The downtube also makes the bike slightly more efficient because it gives the rider a longer powerstroke. To put it simply, the spring absorbs energy from the pedal stroke that is instantly released to the rear wheel, Groendal said.
“You talk about the longer power stroke and a lot of people don’t get it. For the last 100 years, people have said that if your frame flexes you lose energy, which is an untrue assumption,” he said.
While Alter Cycles plans to import the majority of its bikes from overseas manufacturers to remain cost competitive, the company is partnering with several local manufacturers to produce the downtubes. The company turned to Grand Haven Powder Coating Inc. and Spectrum Industries Inc. to coat the downtubes and apply a variety of finishes. Alter Cycles is currently quoting manufacturers in Grand Haven, Muskegon and Coopersville for the tooling work.
Alter Cycles’ downtube is made with flexible nylon connections that make the product interchangeable and modular, Groendal said. That means customers can choose between different thickness to change the ride characteristics and customize their bikes with different colors and patterns of downtubes.
To fund initial tooling and operational costs, Alter Cycles has turned to private investors in the regional bicycle community, Groendal said. The company has raised $50,000 toward a goal of $500,000 as of Feb. 13, according to filings with federal securities regulators. Groendal declined to disclose the identity of the current investors.
The company expects that its bikes will go on sale in June 2015 and retail from $899 to $1,299, depending on the model, Groendal said.
Alter Cycles’ decision to market to recreational-focused consumers could prove effective while the company operates in an otherwise flat industry, said Fred Clements, executive director of the National Bicycle Dealers Association (NBDA).
The bicycle industry has remained relatively flat since 2003 with sales hovering between $5.8 billion and $6.1 billion per year, with the exception of 2009 when the industry hit a low of $5.6 billion, according to data from the NBDA.
Within the industry, the bicycle commuter market is the one sector seeing movement, Clements said. As urban centers develop and put vehicle parking at a premium and as commuters pay more attention to the environment, organizations and companies have started advocating for more bicycle-based transportation and infrastructure.
“Transportation is something that people are betting on,” Clements said.
Selling consumers on the new technology will not be the only hurdle for Alter Cycles, as the company now looks to get its bikes in dealerships. Increasingly, industry leaders such as Trek and Cannondale are pushing bike shops to exclusively sell one brand of bikes, equipment and accessories, Clements said.
“If you’re a Trek dealer, you’re discouraged from carrying other brands,” Clements said. “What (Alter Cycles) is facing isn’t an easy path.”
However, since the crux of Alter Cycles’ product is its modular downtube, the company has received positive feedback from dealers, who can earn more margin selling the variety of downtubes than they can in selling the bikes, Groendal said.
“We went to a trade show out in Las Vegas, and all the dealers were very excited because they can just sell downtubes and make 50 percent margin instead of 30 percent on the bike,” he said.
Groendal also has previous experience with the flexible downtube concept. His first two companies, Slingshot Bicycle Co. and ERB Energy Return Bicycles LLC, both used a visible spring and wire set up in lieu of a downtube.
Both previous companies marketed their bikes solely to the bicycle racing industry. However, the concept was not accepted by the majority of racers and the exposed wire and spring did not resonate with others who saw the bike as being unsafe, he said. Groendal sold Slingshot in 1994 and still owns ERB, but he has currently shifted all of his focus to Alter Cycles.
“Dealers are wanting the bike now, whereas before it was always a struggle,” Groendal said. “I learned a lot from the last time. The race market was really tough. We aren’t going into that market right off.”